Why I think Mr Mushinge resigned unexpectedly27 Nov 2020 12:51
When Don Bailey resigned in August the RNS title was “Board Change” i.e. mutually agreed
Yesterday’s RNS had the title “Resignation of Non-executive Director”
There was no real need for him to resign, if a JV is proposed I would hope it will be an entirely separate entity that owns the relevant assets, separate from Arc Minerals.
The most compelling argument though is Nick’s comments or lack of them.
"I would like to thank Mumena and we wish him well for the future."
Remember in May this year Mr Mushinge agreed to sell a 20% stake in Zaco to Arc in exchange for Arc shares. That took Arc’s holding in the licence from 52.5% to 72.5%; he in effect handed over control of that licence to Arc. At that point they were both on the same page. He took Arc shares believing that his big pay day would come through his ownership of Arc shares.
Yesterday Nick could have thanked him for his contribution to the company, especially in relation to allowing Arc to take a commanding stake. He could have also mentioned that although he was leaving he still had a significant stake as a major shareholder, Nick did neither.
If Mr Mushinge is not happy about the deal being negotiated, for whatever reason, he may have spit his dummy out and if so he would now regret selling that stake in Zaco. If that is the case, Nick thanking him for his contribution in assisting Arc to take more control of Zaco might have been seen as rubbing salt into his wounds, hence the very brief comment.
For arguments sake, let’s say Mr Mushinge prefers a full takeover and instant riches. In May, prior to the EA, that may well have been the number 1 option. If AA are now pushing for a JV that doesn’t give instant riches but places the value of Arc, post the JV, at the whim of the market, he may be less keen.
As investors here we should all be grateful to Mr Mushinge for selling 20% of the Zaco licence for, let’s face it, not much at the moment. For Nick to not even mention his assistance in his farewell comments I think tells us Mr Mushinge was not happy and just resigned.
I don’t think he would sell his shares because he knows what it is all worth and he’d get nothing for them at the moment anyway.
AIMO
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